Evolution Markets, Inc. v. Alpental Energy Partners, LLC

221 F. Supp. 3d 361, 2016 U.S. Dist. LEXIS 165294, 2016 WL 6906714
CourtDistrict Court, S.D. New York
DecidedNovember 16, 2016
DocketNo. 16-cv-1478 (CM)
StatusPublished
Cited by4 cases

This text of 221 F. Supp. 3d 361 (Evolution Markets, Inc. v. Alpental Energy Partners, LLC) is published on Counsel Stack Legal Research, covering District Court, S.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Evolution Markets, Inc. v. Alpental Energy Partners, LLC, 221 F. Supp. 3d 361, 2016 U.S. Dist. LEXIS 165294, 2016 WL 6906714 (S.D.N.Y. 2016).

Opinion

MEMORANDUM DECISION AND ORDER GRANTING PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT

McMahon, C.J.:

Evolution Markets, Inc. (“Evolution”) and Alpental Energy Partners, LLC (“Al-pental”), entered into a contract pursuant to which Evolution was to broker transactions in carbon emissions credits for Al-pental in exchange for a fee. Evolution now sues Alpental, alleging that Alpental breached that contract by failing to pay the agreed-upon commission.

Alpental counterclaimed alleging that Evolution’s filing suit for breach of contract in a court of law — as is its right under the Constitution and laws of this nation — itself constituted a breach of the contract, in that any agreement between them was “confidential” in nature and should have been filed under seal. Alpental also argues that it never authorized the transaction as to which no commissions were paid, so no commissions were owed.

Evolution is entitled to recovery. Under the clear and unambiguous provisions of the contract it signed, Alpental authorized the challenged transaction (hereinafter the “February 10 transaction”) by failing to object to it within one day after receiving a written confirmation of the deal. Furthermore, it has repeatedly acknowledged its obligation to pay Evolution for brokering the deal. Therefore, Evolution is entitled to summary judgment on its claim for $157,558.18, with interest from the date of the breach, which was June 23, 2015.

Alpental’s “counterclaim” is dismissed with prejudice. The documents filed as exhibits to the complaint include the contract on which the claim is predicated and documents generated in conjunction with the challenged transaction — all evidence germane to the claim in suit, none of which could ever be kept from the Court. There is a presumption of public access to documents filed in connection with judicial proceedings, which means that no litigant in a court of law has a right to keep evidence secret and no filing may be made under seal without the permission of the court. This Court is particularly hostile to efforts to litigate in secret and under seal and [364]*364would never have granted permission to file a simple brokerage contract, which contains no “trade secrets,” under seal. If Alpental wanted to keep the terms of its contract confidential, then it should have abided by them and paid the money that was owed, so that Evolution did not have to resort to the courts to vindicate its undisputed and indisputable contractual right.

BACKGROUND

The following facts are undisputed.

The Brokerage Agreement

Evolution, a Delaware-organized corporation with a principal place of business in New York, is a commodities brokerage firm that arranges emissions transactions, including deals involving carbon emissions and offsets. Rule 56.1 Statement of Facts ¶¶ 1, 3, EOF No. 19 (“Pl.’s 56.1”). Lenny Hochschild is a Managing Director at Evolution. Hochschild Decl, to Pl.’s Mot. for Summ. J. ¶ 1, EOF No. 17-1 (“Hochschild Decl”).

Alpental is a Utah limited liability company that principally does business in Utah. Rule 56.1 Statement ¶ 2. Brady Olson is a manager at Alpental. Olson Decl. to Def.’s Opp’n ¶2, EOF No. 21 (“Olson Decl.”).

On February 23, 2011, Alpental engaged Evolution as its exclusive broker for emissions credits (the “Brokerage Agreement”). Pl.’s 56.1 ¶¶ 4-5; Def.’s Resp. to Pl.’s 56.1 ¶¶ 4-5, EOF No. 20 (“Def.’s Resp. 56.1”). The Brokerage Agreement, which is attached to the complaint as Exhibit A, contains the following information: the names of the parties, the purpose of the agreement, an outline of the duties to be performed by Evolution at Alpental’s direction, an exclusivity clause, directions for filing confirmations, and a clause obligating Evolution to provide market information relating to emissions credits to Al-pental at the latter’s request. It outlines the parties’ agreement concerning Evolution’s compensation, allocates risk as between the parties, contains representations and warranties by Evolution concerning its ability to perform, and addresses to which notices should be filed. There is an assignment and waiver clause, a provision concerning termination, breach and cure, and the governing law is that of New York. There are in the three-page Agreement no secret formulas, customer lists, or any other information that could arguably be considered confidential business information, other than the fact that it was made.

The agreement contains two provisions that are integral to this lawsuit.

The first is found in Clause 3, which explains how the deals are to be done. Alpental directs Evolution about the terms on which it would be willing to transact in emissions credits, and Evolution may then approach potential counterparties. Should there be an acceptance of Alpental’s terms, Evolution may close the deal on a recorded call, but must provide written transaction confirmation to Alpental immediately thereafter. The agreement then clearly states, “CLIENT [Alpental] shall notify EVOLUTION with one (1) business day after receipt of the Confirmation of any disagreement with the terms set forth therein. This Agreement and the Confirmation shall comprise the terms and conditions of the transaction. In the event of a discrepancy between this Agreement and the Confirmation, the Confirmation shall govern.” PL’s 56.1 ¶ 6; Def.’s Resp. 56.1 ¶6; see also Hochschild Decl. ¶4, Ex. A ¶ 3.

The second provision of relevance is Clause 9, the confidentiality provision. It states: “The parties acknowledge that the existence and substance of this Agreement, and all subsequent transactions re[365]*365lating to the Emissions Credits, as well as other information disclosed between the parties, are confidential and shall not be disclosed to any other party except pursuant to administrative regulation or judicial order.” Pl.’s 56.1 ¶ 6; Def.’s Resp. 56.1 ¶ 6; see also Hochschild Decl. ¶4, Ex. A ¶9.

In exchange for Evolution’s brokering the sale, purchase, or exchange of emissions credits, Alpental agreed to pay Evolution a commission worth 2.5% the value of the transaction. Pl.’s 56.1 ¶¶ 5-6; Def.’s Resp. 56.1 ¶¶ 5-6. The parties agreed that forty percent of Evolution’s commission would be due and payable at the time Alpental entered into an emission credit purchase or sale agreement with its coun-terparty, and the remaining sixty percent of the commission would be paid when the first emission credit was issued. Id. Neither Evolution nor Alpental contests the existence of the Amendment or the nature of its terms.

The parties further agreed that any dispute arising from the Brokerage Agreement would be “governed by and construed in accordance with the laws of the State of New York,” and further, that “Each party hereby submits to the jurisdiction of the state and federal courts located In New York City, Borough of Manhattan.” Hochschild Deck ¶4, Ex. A at ¶ 14.

The First Emissions Deal

On October 25, 2011, Evolution brokered a sale of emission credits between Alpental and an entity called CE2 California III LLC (“CE2”). PL’s 56.1 ¶ 7; Def.’s Resp. 56.1 ¶ 7. Evolution is not asserting a claim with respect to this transaction, which seems to have fallen apart, in any event. However, the dispute over its commission is an integral part of Plaintiffs claim for failure to pay commissions in connection with a subsequent deal, discussed infra.

In the -CE2 transaction, Alpental agreed to transfer to CE2 a fixed number of emission credits from 2012 through 2019.

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Bluebook (online)
221 F. Supp. 3d 361, 2016 U.S. Dist. LEXIS 165294, 2016 WL 6906714, Counsel Stack Legal Research, https://law.counselstack.com/opinion/evolution-markets-inc-v-alpental-energy-partners-llc-nysd-2016.